Boom or bubble?
Green tech will be the lead industry of the future.
Green revolution? Green technology is not only windmills and solar cells. All industries are affected, says Professor Torsten Henzelmann. The Roland Berger Consultant examined the market on behalf of the German government. His conclusion: Green tech will be the lead industry of the future.
Is the green revolution now following on the heels of the digital revolution?
I wouldn't exactly call it a revolution. Green technologies are the logical product of resource scarcity, urbanization and climate change. The goal is to provide people with clean air, water and energy.
What is the green economy, really?
We view green tech as comprising six lead markets: environmentally friendly energy and energy storage; energy efficiency; raw materials and materials efficiency; recycling; sustainable water management; and sustainable mobility. This is a global market worth EUR 1,400 billion. And this does not include, for example, companies trading in green products or banks offering green investment products.
So it's not only about windmill and solar cell manufacturers?
No, not at all! I find it amazing that when people hear "environmental technology", they automatically think of windmills and photovoltaics. Of the aforementioned EUR 1,400 billion, renewable energy make up just about 90 billion. In contrast, energy efficiency constitutes EUR 540 billion. Engineered products and electronic technology, used to manufacture energy-saving pumps or control technology, are much more important.
Green electricity is being subsidized by the state and big power drainers like light bulbs are being legally prohibited. Is demand being artificially pumped up?
Green tech is neither hype nor new economy. We have proven business models for engineered products and electro-technology which are now being applied to environmental technology. Energy efficiency is a huge market even without government support, due to high energy prices and limited resources alone.
Then why do we need state subsidies?
Because there are some innovations that would never be ready for the market if government hadn't stepped in and helped out in the early stages.
The state is spending billions. Is this still justifiable?
Yes. If the state believes in climate change and resource scarcity, then it needs to give "green" a push in the right direction. However, the state shouldn't fund technology that is already in the growth phase. Such technology has to be able to stand on its own two legs.
Many years ago, VW brought out a 3-liter car, but nobody bought it. Is there in fact more lip service being paid to environmental awareness and sustainability than actual action?
There are surely economic limits. You're not going to buy any white or brown products that are significantly more expensive than the competition. However, I do believe that customers are now paying more attention to an appliance's consumption or how much carbon it emits.
Is sustainability already a topic at all companies?
Yes, at least at most companies. Companies that are not currently asking what green and sustainability mean for them will have problems in the medium term.
What green levers do companies have?
In theory, such levers can be found everywhere, ranging from purchasing energy-efficient materials or product development all the way up through marketing. Even accounting is affected: I know many large companies that, for their own climate balance sheets, require detailed lists from their suppliers about the carbons emitted during the production of purchased goods. If a supplier cannot provide such a list, then its not a good supplier for these companies.
Who earns money with green technologies?
The entire industry earns money. On average, the industry is growing 6.5 percent each year. And the prospects are excellent: By 2020, global market volume for green technologies will more than double in size to EUR 3,200 billion. This means German companies have great opportunities. For example, energy efficiency in engineered products represents a huge competitive edge internationally.
Is the green revolution now following on the heels of the digital revolution?
I wouldn't exactly call it a revolution. Green technologies are the logical product of resource scarcity, urbanization and climate change. The goal is to provide people with clean air, water and energy.
What is the green economy, really?
We view green tech as comprising six lead markets: environmentally friendly energy and energy storage; energy efficiency; raw materials and materials efficiency; recycling; sustainable water management; and sustainable mobility. This is a global market worth EUR 1,400 billion. And this does not include, for example, companies trading in green products or banks offering green investment products.
So it's not only about windmill and solar cell manufacturers?
No, not at all! I find it amazing that when people hear "environmental technology", they automatically think of windmills and photovoltaics. Of the aforementioned EUR 1,400 billion, renewable energy make up just about 90 billion. In contrast, energy efficiency constitutes EUR 540 billion. Engineered products and electronic technology, used to manufacture energy-saving pumps or control technology, are much more important.
Green electricity is being subsidized by the state and big power drainers like light bulbs are being legally prohibited. Is demand being artificially pumped up?
Green tech is neither hype nor new economy. We have proven business models for engineered products and electro-technology which are now being applied to environmental technology. Energy efficiency is a huge market even without government support, due to high energy prices and limited resources alone.
Then why do we need state subsidies?
Because there are some innovations that would never be ready for the market if government hadn't stepped in and helped out in the early stages.
The state is spending billions. Is this still justifiable?
Yes. If the state believes in climate change and resource scarcity, then it needs to give "green" a push in the right direction. However, the state shouldn't fund technology that is already in the growth phase. Such technology has to be able to stand on its own two legs.
Many years ago, VW brought out a 3-liter car, but nobody bought it. Is there in fact more lip service being paid to environmental awareness and sustainability than actual action?
There are surely economic limits. You're not going to buy any white or brown products that are significantly more expensive than the competition. However, I do believe that customers are now paying more attention to an appliance's consumption or how much carbon it emits.
Is sustainability already a topic at all companies?
Yes, at least at most companies. Companies that are not currently asking what green and sustainability mean for them will have problems in the medium term.
What green levers do companies have?
In theory, such levers can be found everywhere, ranging from purchasing energy-efficient materials or product development all the way up through marketing. Even accounting is affected: I know many large companies that, for their own climate balance sheets, require detailed lists from their suppliers about the carbons emitted during the production of purchased goods. If a supplier cannot provide such a list, then its not a good supplier for these companies.
Who earns money with green technologies?
The entire industry earns money. On average, the industry is growing 6.5 percent each year. And the prospects are excellent: By 2020, global market volume for green technologies will more than double in size to EUR 3,200 billion. This means German companies have great opportunities. For example, energy efficiency in engineered products represents a huge competitive edge internationally.
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